Who Dares Wins: Focus on Daniel Grollo

Daniel Grollo
is locked in the fight of his life and the very future of his huge and iconic construction company, Grocon, is at stake.

It was only in April that Grollo was handed the keys to Grocon, taking full ownership from his famous father, Bruno, who turned the family firm into one that has built several of Australia’s landmark towers.

Just four months later, the junior Grollo has been in court in three states trying to save it, as militant unionists seek to cripple a three-generation family legacy and its $3 billion pipeline of projects, including the one the dispute is centred around: the $1.12 billion Myer Emporium development in Melbourne’s CBD.

It isn’t a stoush Grollo was looking for – he says “this one has come out of the blue" – but it is one he hasn’t walked away from.

Twice in a decade Grollo has become, willingly or not, a spear thrower for industrial reform in the construction sector.

In 2002, Grollo stuck his head above the parapet and took on the Construction, Forestry, Mining and Energy Union to break the stronghold the union had at Grocon.

A bitter conflict ensued and Grollo eventually was forced to back down and strike an agreement with the union’s then Victorian boss, Martin Kingham.

What has Grollo learnt from that tumultuous time?

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“I didn’t have as much experience then," he tells the Weekend Financial Review with forceful intent. “I’m certainly older. You’d hope I’d learnt a little bit over time." He certainly has. Last time around Grollo, then 32 and still relatively fresh at the top echelon of the family company, spent much of his time bunkered with his legal team, trying to figure a way through the impasse.

Public opinion was generally with the union.

But the battle, then as now, was always out on the street and this time Grollo has been much more visible.

“We have communicated well," he says. “We think that communication is really important. We’ve been tireless communicating both externally and internally."

Grollo has been the frontman, putting Grocon’s side of the story to the public.

The battle for the hearts and minds of Grocon’s workforce is just as intense. He has been “walking the sites", he says, and the workers, and even sub-contractors have been supportive.

But the unions are again going in hard personally against him – “that hasn’t changed" – and the fight has become dirty.

Individual Grocon workers have been identified as “scabs" on a now infamous handbill. Harsh words have been used against Grollo on placards fixed to the Myer site.

Despite the vitriol, he has not risen to the bait, sticking instead to a clear game plan established by his inner sanctum.

Ranged against him is the might of Victoria’s most militant union, the CFMEU. And no one personifies that more than its assistant state secretary, John Setka

So has it become a personal feud between the longtime labour leader and the construction boss?

“I don’t think so," Grollo says. “There’s a long list of different union officials around the country that I’ve dealt with. You’re never going to love everyone you work with. I don’t think the core of this dispute is an ideological gap between John and I."

The blockade keeping Grocon workers off the site, Grollo firmly insists, is illegal. And that’s a point even the union concedes.

Grollo has resisted the impulse to grandstand.

He makes his points carefully about failings in the current IR system, but he is wary about being recruited as an ideologue leading a campaign to crush the workers.

And he rejects the notion of being the next Chris Corrigan, leading a crusade against unionised labour.

“I don’t want to be associated with those kind of tags. At the end of the day, we’re not looking to think that getting through this issue is going to somehow dramatically change the landscape of our industry. All we want to do is get our people back to work safely."

Nor is he living with his head in the sand.

Grollo travels frequently, within Australia, and abroad – his family is living in New York. And he is a diligent reader of the literature on leadership.

Although he downplays it, he has clearly thought long and hard about the relationship, or lack thereof, between management and workers.

“You go to countries like Germany," Grollo says. “There are some very good examples of where unions work very well with capital. That is where the future is at.

“The future of industrial relations has got to be, not ‘bash the bosses’ but ‘celebrate the best employers that are providing the best conditions for their employees’.

“There’s got to be an alignment of unions and capital, rather than the class warfare of the past," Grollo says.

The brutal stand-off between Grollo and the union that started two weeks ago has helped focus attention on some of the glaring failings in Australia’s industrial relations system.

The dispute centres on the CFMEU demand to appoint its own men to be the safety representatives and shop stewards on site. Grollo says those men should be popularly elected by the existing workforce.

It’s a sensitive issue in the construction industry and the role played by a safety rep, unionised or not, can be pivotal in the progress and productivity of a site.

The union has claimed they had a deal on this issue, despite signing off on an enterprise bargaining agreement three months ago.

Grollo rejects that.

“We had talked about originally how we identify appropriate shop stewards.

“But ultimately there is a clear way that it happens. There’s an Act there. They knew that when they signed onto an EBA. There’s been no wiggling by us. We don’t agree on some of the people they would like us to employ, yes," he says.

“It’s a pretty ordinary job application if one day someone is standing on a blockade, illegally blockading our sites, not letting our employees get to work and then they turn around to those same employees and say ‘can I represent you please?’," he says

He also vehemently rejects the notion that his stand is compromising safety on Grocon sites. “Everyone in Grocon takes safety pretty seriously," he says.

“When the allegations came out about us being unsafe, that really hurt our people. If you’re not prepared to come on the journey of safety, then we are not the right place for you."

If it all sounds familiar, it is. Last time he walked into a union blue, Grollo led with his chin.

He told a November 2002 Property Council lunch that the Victorian building industry was a “basket case" because of poor work practices.

His relationship with Kingham and the CFMEU spiralled downwards quickly as Grollo went on to say illegal strikes and union domination of management rights put a huge impost on business and harmed productivity.

The dispute brought the $650 million QV project, ironically around the corner from the present Myer Emporium site, to a standstill and led to Grollo labelling it the most disrupted and malicious in the history of the company.

But a move to bring in a non-union workplace agreement failed when Grocon staff voted against the move.

An enterprise agreement with the CFMEU was then struck along usual industry lines, and for years afterwards Grollo revealed little about his thoughts on industrial relations.

Grollo agrees he is more mature this time. A wiser guy. He’s working smarter. Or in his words, more “rounded".

He says the culture at Grocon 10 years on is vastly improved and heaps praise on his staff.

“Their solidarity under extreme pressure and intimidation has been the strength of the organisation."

“We weren’t as strong as that 10 years ago. They’ve been prepared to stand up for what the company stands for,"he says.

Grollo claims this to be the key difference from a decade ago.

“We are a long way ahead of where we were back then. At the end of the day our employees voted against us [last time].

“This time our employees are voting for us. That is the fundamental difference," he says.

His friends say Grollo will this time see this dispute through to the end.

AFL chief executive Andrew Demetriou, a close friend of Grollo, says: “Daniel is resilient. He’s a strong person who is steadfast in his beliefs. But he cares about his staff and wants to see the right thing done. He’s a tough person who has a lot of passion about his projects so he will keep going. I’m convinced of that."

Yet the conservative side of politics and especially fellow construction bosses have not exactly rushed in to back Grollo.

It’s a very competitive industry, Grollo acknowledges. One company’s labour losses can be another company’s gain.

As Grollo puts its: “Companies go through their own issues and there’s not a lot of alignment."

Instead, Grollo is relying on the team he has built as he consolidated his grip on the company he now runs.

He has a box seat view of the crisis that is threatening his empire. From his company headquarters at QV Centre, he can see the blockade.

His key lieutenants are there, including John Van Camp, a former CFMEU official who now manages the Grocon workforce, Grollo’s deputy chief executive, former lawyer Carolyn Viney, and a key strategist, Michael Zorbas, recently hired from Stockland.

A consumate networker, Grollo admits to personally speaking to Federal MInister Bill Shorten late in the week.

But he will not bow to the union blockade. “Unions have a role to play, but they’ve got to do it responsibly," he says.

“ The current behaviour that’s occurring with the CFMEU in Victoria is not responsible to themselves, is not responsible to the CFMEU nationally, to the whole union movement or our industry.

“The construction industry is getting tarnished. The union movement across Australia is getting tarnished. The CFMEU is getting tarnished.

“If the guys in Victoria want to carry on like they are, it doesn’t make a lot of sense to anybody," Grollo says.

“I’d like to see more of the influences around the CFMEU (help) to change the mindset, to get them to comply with the law.

“Who are the 10 or 15 key stakeholders who influence the CFMEU leadership and what is their view of a union that sees itself above the law in three states of Australia?" Grollo says.